The continuing labor shortage is forcing companies to be creative and aggressive in recruiting employees. Some new approaches to hiring can help you snag and keep top talent.

See "Better Than the Average Question"

When it comes to hiring, it’s a jungle out there. Unemployment rates are at record lows, and companies are scrambling for talent. Not only is it taking longer to fill positions, but the costs of hiring have skyrocketed. Make a hiring mistake and be prepared to pay even more: The estimated cost of a bad hire ranges from 1.5 to 5 times the departing person’s salary.

The job market for accounting and financial professionals is particularly good. "Every quarter we survey 1,400 CFOs about their hiring expectations. Generally speaking, there has been a steady, strong demand for accountants at all levels," according to Lynn Taylor, vice president and director of research for Robert Half International, a professional staffing firm in Menlo Park, Calif.

What do candidates want? "In terms of compensation, there is a continual increase in the requests for performance-based compensation including bonuses and stock options. Perhaps 10 years ago, you would have had only CFOs asking about that, whereas now, especially in Silicon Valley, there are accountants at all managerial levels making those inquiries," Taylor states. However, she quickly adds, "It used to be that compensation was everything, but the most interesting shift that we have seen is an interest in corporate culture: It has risen to the highest visibility level."

When asked to define corporate culture, Taylor provides a diversified list of components: length of the workday and weekend work, flexible hours and/or telecommuting, style of management (participatory or dictatorial), educational opportunities and availability of mentoring programs. A recent survey by Robert Half International looked at the most important line of questioning by job candidates in interviews. The results, says Taylor, showed "that corporate culture rivaled benefits in terms of importance." She contends, "It’s a pretty major finding when a candidate is talking about medical benefits and a casual dress code in the same sentence."

Recruiting Makeovers

About 70 percent of American companies have altered their hiring and selection process over the last 10 years in order to stem the tide of endless bulk recruitment. Here are just a few of the actions companies can take to find the right hire:

  • Cast the widest net possible. Gone are the days of simply using newspaper ads to attract candidates. Dr. Pierre Mornell, author of "45 Effective Ways for Hiring Smart" (Ten Speed Press, 1998), says, "Let a wide range of people know that you’re looking for candidates: friends, colleagues, consultants, professional associates, board members, ex-employees, even family members, as well as search firms and trade groups." Other methods include postings on Internet job sites or on a company’s Web site, company open houses, and local job fairs. Campus recruiting is a staple for many companies, and there has been a dramatic increase in internship programs, in an effort to win collegiate loyalty before graduation.
  • Employee referral programs are taking on a more structured form in many organizations. "Referrals are great because no employee is going to refer candidates who are not good at what they do. Basically, it’s just an extension of networking, which has always been a useful tool," Taylor says. Employees who make referrals are rewarded in any number of ways: time off, extra vacation time, or dinner or lunch at a local restaurant. When money is given, the amount can range from $50 to $5,000.

  • Recruit from within. Too often companies overlook current employees when filling a position. Taylor remarks, "That’s ironic because companies are being pressed to hire in a record-low unemployment environment, and here are these employees in front of you. It’s important to first look at what you have on deck. If you do promote from within, you have the ancillary benefit of communicating to all your employees that they too can be promoted. There’s a morale-boosting side to it."
  • Be on the lookout for talent — constantly. Don’t just look for candidates when there is a job opening, but keep track of potential hires all year long, whether you meet them in a business setting or a social setting. In addition, when interviewing, make everyone feel special and respected. Those who don’t get the job will act as public-relations agents, conveying to others their impressions of the company based on their interviews. Also, the person you don’t hire today may be the person you need in six months.

Back to the Basics

Mornell, a psychiatrist and consultant, says it is easy to be swept away by a candidate’s single, shining interview. He explains, "It’s like an acting audition in Hollywood. If you nail it, the chances are that you are going to get the part." He suggests that interviewers follow Mornell’s maxim: "The best predictor of future behavior is past behavior." In other words, pay attention to deeds, not words.

To ensure that the hiring process yields the best results, follow these 10 guidelines:

  1. Fine-tune the job description. It needs to be both accurate and complete. The required tasks must be listed as well as the personal traits required, such as problem-solving skills, communication skills or the ability to motivate people. Taylor says that a well-crafted job description has a number of benefits: It weeds out those not suited for the position; helps the candidate evaluate the job opportunity; helps determine the appropriate compensation for the job; enables the company to assess how long it will take to find the right candidate; and assists the manager in evaluating employee performance once the person is on the job.

  2. Read resumes in teams. Different people will focus on different aspects of a resume, whether it’s a gap in employment history or the fact that a candidate can speak three languages. Mornell suggests a team of three to five people. He says, "It’s a way of getting multiple perspectives on the same story. Very few companies do this, but it is very effective. You can get through 15 resumes very quickly."

  3. Watch out for big changes. Is the candidate moving from a small organization to a large one? Is the person moving from an entrepreneurial culture to a very structured one? You shouldn’t rule out people who are making major shifts, but "proceed with caution. It’s like a flashing yellow light, for both you and the candidate," Mornell says.

  4. Ask all your questions at once. While this may seem a little odd, Mornell advises that you verbally state all your questions (perhaps six crucial ones) and/or hand the candidate a sheet of paper on which the questions are printed. He claims that the technique accomplishes two major objectives: "It forces you to listen, and it allows the candidates to see the road map and get to the destination any way they want." As the candidate answers the questions, the interviewer can interrupt occasionally with "Tell me more" or "Can you give me an example?"

  5. Look for signs that candidates recognize that businesses are run to make a profit. Taylor states, "Ask prospective candidates what projects they are particularly proud of. Or look at their resumes to see what projects they have listed. Did the candidate institute a new credit or collection program that reduced the 60-day cycle down to 30? Did the person uncover something that saved the company thousands and thousands of dollars? These are the things that show that candidates care about their jobs and understand what the company goals are."

  6. Put problems on the table. All candidates have some problems, and if you haven’t discovered them, says Mornell, "then you have done something wrong in your due diligence." As an example, he cites the case of a CFO candidate whose skills and background were stellar but who had a hard time saying no to people and had a tough time firing employees. Mornell says, "We discussed this with him, and it became very clear that he had to be a nice guy. He wasn’t very good at conflict and confrontation. We wanted to hire him, so we paired him up with somebody in the organization who could be the bad cop."

  7. Give a five-minute warning in the interview. As the interview draws to a close, the interviewer should say, "We have about five more minutes." Mornell says, "Regardless of the amount of time you have spent together, the candidate will usually say something very important in the last five minutes. It may be good or bad, but it’s usually charged. You’ve given them a blank sheet of paper, and it allows them to say anything they want to." The last-minute revelations can cover a host of business and personal issues: I can’t work on Saturdays because ... . My management skills are my best asset because ... . My child has a serious illness, and I need to better understand your insurance benefits ... . The salary you offer is below my current salary and ... . One of the references I listed might say ... . I’m very suited for this position because ... .

  8. Give an assignment. Mornell says, "Not to give an assignment is crazy. It allows you to see what the caliber of work is. And it eliminates a lot of candidates who aren’t interested enough or motivated enough to follow through." For example, he recalls a CFO finalist who was given the task of looking at a possible acquisition for company ABC; the company provided the nonconfidential data. According to Mornell, "The candidate came up with three scenarios — a conservative scenario of what the company was worth, a middle-range scenario and a very aggressive scenario — all with the numbers to back them up. The work was outstanding." The candidate was hired.

  9. Check references. According to Mornell, "Most people feel that checking references is about as appetizing as eating fish eyes." First off, if you really like the candidate, you don’t want to hear any negative information. Secondly, if you talk to anyone in the legal department or the human resources department, about all you will get is name, rank and serial number. When checking references, Mornell suggests a fast, and legal, method: Call a reference at lunchtime when you are likely to reach voice mail or a person’s assistant. Say, "John (or Jane) Jones is a candidate for (the position) in our company. Your name has been given as a reference. Please call me back if the candidate was outstanding." If nobody calls you back, you have learned something.

    Interviewers can also go beyond the candidate’s list of references. Call other people you know who work for the candidate’s former employers. The resume will show a variety of sources to pursue: organizations, board memberships, school affiliations, etc.

  10. Figure out why candidates are hesitating. When candidates seem uncertain about accepting a job offer, interviewers usually jump to the conclusion that money is the stumbling block. However, there are many reasons for inertia: actual job description, educational or growth opportunities, commute time, or the boss to whom the new hire will report. You need to get at the root of the problem before you can address it. Taylor suggests, "You can uncover a lot by opening the communication line. You can say, ‘I would like to find out what is going on in your mind about the position and make sure that you fully understand it. Are there any aspects of this job that concern you?’ " She concludes, "If the candidate spends a lot of time talking about flextime and your company doesn’t offer it, that’s a big red flag right there."

Hiring "Attitude"

The continual job crunch has caused companies to resort to all kinds of recruiting practices including skywriting and billboard advertising. In an effort to attract candidates, companies offer several unusual perks like afternoon massages, on-site car repair, entertainment concierges, mobile dental vans and bring-your-dog-to-work days. Too often, the competition for new hires causes managers to focus more on selling the company than on finding a person with a proven track record who will fit in and add value.

Taylor says, "Today many companies are taking the approach of hiring attitude. You can teach more sophisticated, specific accounting skills to someone who has a strong thirst for knowledge and good, sound judgment skills. But you can’t teach enthusiasm. You can’t teach a positive outlook. You can’t teach interpersonal skills, though you can practice and develop them. Regardless of the economic cycles, if you have an MBA — with a [Big-Five] top-notch, beautiful resume — who irritates everyone and is not a team player, then that will hurt you in the long run."